Figure 20-4 Heft Company produces A and B with contribution margins per unit of $40 and $30, respectively.Only 500 labor hours and 300 machine hours are available for production.
Time requirements to produce one unit of A and B are as follows:

- Refer to Figure 20-4.What is the constraint on machine hours for Heft Company?
A) 1A + 4B £ 500
B) 5A + 2B £ 500
C) 1A + 4B £ 300
D) 40A + 30B £ 500

Question

Figure 20-4 Heft Company produces A and B with contribution margins per unit of $40 and $30, respectively.Only 500 labor hours and 300 machine hours are available for production.
Time requirements to produce one unit of A and B are as follows:

- Refer to Figure 20-4.What is the constraint on machine hours for Heft Company?
A) 1A + 4B £ 500 
B) 5A + 2B £ 500 
C) 1A + 4B £ 300 
D) 40A + 30B £ 500

Quizplus · Accepted Answer

The machine hours constraint is determined by the time requirement to produce each product and the available machine hours. One unit of A requires 3 machine hours and one unit of B requires 2 machine hours. Therefore, the machine hour constraint is 3A + 2B ≤ 300. This can be simplified to 1A + 4B ≤ 300, which is option C.

Figure 20-4 Heft Company Produces a and B with Contribution